Computershare (CPU)

Deutsche Bank maintained a “hold" recommendation for
Computershare
after the company announced the acquisition of Olympia Corporate and shareholder services business of Olympia Financial Group in Canada for $C43 million.

Deutsche Bank said with only $C12 million of revenue, this is a small, but complimentary, deal for CPU.

However, the ability to extract significant cost synergies should see the deal ultimately add 1 per cent to group earnings per share.

Combined with an improving backdrop for corporate actions, this suggests upside risk to CPU’s 5 per cent fiscal 2014 earnings per share growth guidance. However, with CPU trading at only a 3 per cent discount to Deutsche Bank’s $10.20 price target, long-term value appeal still appears relatively limited.

Earnings per share were 55¢ in 2013 and forecast to be US57¢ in 2014 and US62¢ in 2015.